Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, RBC Capital Markets reiterated its positive stance on Chipotle Mexican Grill shares (NYSE:CMG), maintaining an Outperform rating and a $70.00 price target. The stock currently trades at a P/E multiple of 41.9x, with analyst targets ranging from $46 to $72. According to InvestingPro data, CMG has seen a significant price decline of over 20% in the past six months, while maintaining strong revenue growth of 14.6% in the last twelve months. Investors have been engaging in discussions about the company's performance drivers, margin trajectory, and leadership since the departure of the previous CEO last year.
The analyst acknowledged near-term challenges for Chipotle, such as headwinds and tough year-over-year comparisons in the first half of 2025, which may constrain the company's ability to counter bearish sentiments in the coming quarters. Despite these concerns, the analyst believes that Chipotle's fundamental growth drivers remain robust. InvestingPro analysis supports this view, with the company maintaining a "GREAT" financial health score of 3.06 out of 5, strong cash flows, and a healthy current ratio of 1.52. These include the company's pricing power, a strong consumer value proposition, and opportunities for significant throughput improvements, which are currently being addressed by the company.
Additionally, the analyst mentioned the potential for Chipotle to perform relatively well in a scenario with increased tariffs, as customers might opt for more affordable dining options, with Chipotle's offerings being less expensive compared to other fast-casual chains such as Sweetgreen and Cava. With the company's next earnings report scheduled for April 23, 2025, investors seeking deeper insights can access comprehensive analysis and 16+ additional ProTips through InvestingPro's detailed research reports.
The report also touched upon Texas Roadhouse (NASDAQ:TXRH), indicating some investor interest due to the stock being approximately 25% below its November 2024 peak. However, the conviction behind Texas Roadhouse was described as somewhat limited compared to the attention Chipotle has received.
In other recent news, Chipotle Mexican Grill has been the focus of several analyst updates and assessments. RBC Capital Markets maintained its Outperform rating on Chipotle, setting a price target of $70, after evaluating the popularity of the new Chipotle Honey Chicken menu item. Meanwhile, Stifel analysts adjusted their price target for Chipotle to $65 from $68, citing challenges in first-quarter sales comparisons but maintaining a Buy rating due to anticipated improvements in the second quarter. Oppenheimer also reaffirmed its Outperform rating with a $66 price target, highlighting potential opportunities in Chipotle's stock despite recent declines and minimal expected impacts from tariffs on earnings per share.
Additionally, Bernstein SocGen Group lowered its price target for Chipotle to $60 from $70, while keeping an Outperform rating. Bernstein expressed concerns about achieving same-store sales growth targets and improving margins but remained optimistic due to Chipotle's strategic positioning in the growing Latin American Limited Service Restaurant category. The analysts from Bernstein also noted Chipotle's appeal to Generation Z and health-conscious consumers as factors supporting its growth prospects. These developments reflect a mixed but generally positive outlook from analysts, with a focus on Chipotle's strategic initiatives and market dynamics.
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